Ripple (XRP) Given Opportunity To Prove Itself
The Class Action suit brought against Ripple (XRP) by James Coffey has attracted sharp reactions from the Twitter community; with many holding the view that it’s misplaced and doesn’t represent all the XRP investors as termed in the suit. And to some, this is an opportunity for Ripple to prove what it has maintained all along: XRP isn’t and doesn’t qualify as a security.
Ripple is still ranked 3rd on coinmarketcap although its performance over the last few days has been on a continuous downward trend. The current price of $0.822 is down -1.01% over that of May 7, 2018. Its trading volume is also down slightly from $602 million worth of XRP traded to the current $467 million. The coin hasn’t been able to make any significant move in the last 7 days as its price has stayed between $0.86 and $0.89.
Even so, Ripple, the cryptocurrency, is still the most popular platform for presenting revolutionary solutions for cross-border payments.
And the feeling is that it’s one of the few cryptocurrency platforms that have a real-world use case and will be valuable in the future. As such, the suit by Coffey against Ripple and CEO Brad Garlinghouse hasn’t gone down well with some in the XRP community.
James Coffey has lodged a complaint that he made a loss of about $551 on his 6-day investment when he bought 640 XRP on January 6th, 2018 at $2.60 and sold all his “investment” on 18th January 2018 via USDT. He recouped $1,105, which led to him suffering the said loss.
While that fact is a matter not under dispute, it’s the nature of the case that has left many not happy at all. The tweet that got Twitter reeling was by James Copeland, Coffey’s attorney in the case. He last week tweeted:
“Taylor-Copeland Law files suit against Ripple on behalf of XRP investors.” James Copeland
That tweet got Twitteratians fuming and questioning whether the case should even make it to court, let alone succeed against Ripple. They tore into the alleged fact that the case was on behalf of all XRP holders; from when the XRP coin was first traded in 2013.
The lawsuit also termed Ripple a “never-ending ICO”, meaning it has violated US SEC laws by evading registration as security.
One XRP holder fired:
“As an XRP holder I want to inform you and others that you do NOT represent me, I demand to be excluded from the class. Furthermore, I will be discussing with my lawyer any legal remedies against you and your client if your frivolous lawsuit results in damage to my holdings.”
This was the theme for much of the day as more and more felt that the complainant may just be someone out for fame. They even went ahead to suggest that the suit represents Ripple with an opportunity to once and for all put to bed arguments about it being a security. The issue of XRP being classified as a security has long been a topic of discussion.
The suit has stated that Ripple is a security, posing that:
“Plaintiff and the Class invested fiat and other digital currencies, such as Bitcoin and Ethereum, to purchase XRP. Investment of both fiat and digital currency meets the first prong of Howey.”
The Howey test refers to the various ways of determining whether a given coin or token falls into the category of securities. Ripple executives have maintained that it’s not and that there’s no direct link between XRP and Ripple the company.
Matt Hamilton, a Twitter user said:
“Great, thanks! This is a great service to the XRP investment community in that it will give a test case as to whether XRP is a security or not. And by fielding such a completely inaccurate and easy-to-defend case, it should be settled quite quickly. Well done!”
The same opinion is held by Amy F who says:
“My thoughts exactly. This is a great case to test the theory on. Horrible inaccuracies in pleading and idiotic, non-sympathetic plaintiff. Ripple couldn’t have gotten a better suit.”
It, therefore, remains to be seen what happens going forward, but this suit presents Ripple with an opportunity to prove XRP isn’t a security.